Valve is being sued by five disgruntled gamers over Steam’s distribution agreement, which includes an MFN (Most Favored Nations) provision that prevents developers from selling their games for better prices on competing platforms. The complainants allege that Valve is violating antitrust laws and abusing its dominant position to stay at the top of the market.
“The MFN has the effect of keeping prices to consumers high, as price competition by platforms would cause the prices of PC games sold to consumers to decrease,” the group’s complaint reads. “The MFN also hinders innovation and suppresses output, as it acts as an artificial barrier to entry by potential rival platforms and as higher prices lead to less sales of PC Games.”
“In a competitive market unfettered by the Steam MFN, as platforms compete for game developers via lower commissions, the Steam platform would have to either lower its commissions or otherwise increase the value of its platform to consumers. […] The Steam MFN saves the Steam platform from competing on the merits with other platforms.”
As Law 360 pointed out in its coverage, Steam happens to be responsible for roughly 75 percent of all PC games sales, so it’ll be interesting to see how the federal judge reacts to the case. Valve is also involved in a separate legal entanglement over its Steam Controller, which allegedly infringed upon patents held by SCUF’s Ironburg Inventions.